The Financial Sector Conduct Authority (FSCA) has issued a stern warning to the public regarding United African Stokvel (United African), a digital stokvel that claims to invest clients’ funds in property and telecommunications. The FSCA suspects United African of conducting unauthorized financial services business, breaching financial sector laws, and misleading its clients with false promises. As a result, the FSCA has initiated an investigation into the company’s activities and has taken decisive action to protect consumers and uphold the integrity of the financial services industry.
United African has been operating on social media, enticing potential clients with the allure of high returns from its investments in the property and telecommunications sectors. However, numerous clients have lodged complaints, alleging that they have not received the promised returns despite their investments with the stokvel.
In response to these concerns, the FSCA has clarified that United African is not authorized to provide any financial products or services. Furthermore, the FSCA has confirmed that it has not received any application from United African for a financial services provider license, debunking the company’s claims on social media.
To protect consumers from such financial scams, the FSCA emphasizes that any entity or individual offering financial products or services, including investment recommendations, must be authorized by the FSCA. Moreover, it is crucial for individuals to verify the specific category of advice that the person or entity is registered to provide.
The FSCA’s Investigation and Action:
On June 15, 2023, the FSCA conducted a search and seizure operation at United African’s premises under the authority of the Financial Sector Regulation Act of 2017 (FSR Act). This operation was a part of an ongoing investigation initiated by the FSCA following a whistle-blower’s report. The FSCA will thoroughly examine the evidence, conduct interviews with the relevant parties, and complete its investigation to determine the extent of United African’s illegal activities.
The FSCA’s Commitment to Consumer Protection:
The FSCA remains dedicated to safeguarding the interests of consumers and maintaining the integrity of the financial services sector. Once the investigation concludes, the FSCA will take appropriate regulatory action against United African if found guilty of unauthorized financial services business and breaching financial sector laws. The FSCA is also prepared to report the matter to the South African Police Services and support the Prosecuting Authority in any legal proceedings if necessary.
The FSCA’s Call to Affected Clients:
Clients who have invested with United African are urged to reach out to the FSCA’s Business Centre. The FSCA has set up a dedicated webpage to assist affected clients with their queries. Clients can contact the FSCA through the following link: https://www.fsca.co.za/Pages/Contact-Us.aspx. This outreach is part of the FSCA’s commitment to helping clients who may have fallen victim to unauthorized financial services business.
Remaining Cautious in Financial Transactions:
The FSCA emphasizes the importance of exercising caution when engaging in any financial services-related business. Before investing or seeking financial advice, individuals should verify the authorization of the company or individual offering services. The FSCA’s official website provides a comprehensive database of authorized financial services providers, empowering the public to make informed decisions about their financial dealings.
In conclusion by staying vigilant, consumers can protect their hard-earned money and contribute to a safer financial environment for all.